The Union, New Jersey-based company slumped as much as 29% to $16.34 on Thursday, in its biggest one-day drop since last September, after Cohen’s RC Venturesin a filing with the US Securities and Exchange Commission that it might sell as many as 7.78 million shares of Bed Bath & Beyond, along with some call options.when, in March, RC Ventures first disclosed a 9.8% stake in the retailer and asked it to consider a sale of the company.
“The writing is on the wall that BBBY shares have again decoupled from economic reality,” Wells Fargo analyst Zachary Fadem wrote in a note, reiterating his $3 price target. The company’s plans to address its balance sheet could mean a “capital raise” might be in store. Wedbush downgraded the stock to underperform from neutral Thursday, making it the fourth Wall Street bank to recommend clients sell the stock in the past two weeks. All told, 12 analysts have sell-equivalent ratings while four rate it at a hold and only one analyst recommends investors buy the stock. The average 12-month share price target of $4.75 signals brokerage firms expect the stock to slump more than 70% from Thursday’s levels.
“From a fundamental standpoint, we believe trends at Bed Bath & Beyond remain challenged,” said Keybanc Capital Markets analyst Bradley Thomas in a report after the disclosure from RC Ventures. He has an underweight rating with a price target of $2.
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